Question

buses in a municipal transit system have the characteristics listed. in order to minimize its annual operating expenses, when should the city replaces its buses if money can be borrowed at 8%?

Year Maintenance cost  salvage value 
1 35000 60000
2 38000 55000
3 43000 45000
4 50000 25000
5 65000 15000
     

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Accounting For Decision Making

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: The Colson Company issued 300,000 of 10% bonds on January 1, 2015.The bonds are due January 1, 2020,...

A: Bond: It can be defined as the instrument that carries a fixed rate of income and represents the bor...

Q: On January 1, a company issued and sold a $410,000, 4%, 10-year bond payable, and received proceeds ...

A: Discount = Face value - Issue price Discount = $410,000 - $405,000 Discount = $5,000

Q: How would the process-costing computations differ from those illustrated in the chapter if overhead ...

A: Process Costing: It is a method of cost accounting used by an enterprise with processes categorised ...

Q: The following selected transactions were completed by Fasteners Inc. Co., a supplier of buttons and ...

A: Journal: Recording of a business transactions in a chronological order.

Q: Mighty Muffler, Inc. operates an automobile service facility that specializes in replacing mufflers ...

A: For 600 mufflers  Fixed Costs = $ 42,000 Variable Costs = $ 30,000 Total Costs = $ 72,000

Q: Ben Quayson Social Club has 160 members who contributed an amount of GH¢ 150 each as Life membership...

A: Life Membership Fees is the amount received by the people who would life to become a member of any c...

Q: How solvent is the business and how many interest payments can the business service on its own?

A: Solvency of the company is the ability of a company to meet its long-term debts and financial obliga...

Q: Weighted-Average Method; Transferred-in Costs Sanyo Corporation manufactures a popular model of busi...

A: Compute the total equivalent units as follows:

Q: As the discount rate increases, the present value of a given future cash flow also increases. Do you...

A: Present value, also called "discounted value," is the current worth of a future sum of money or stre...

Q: A company is considering two alternative investment projects both of which have a positive net prese...

A: Internal rate of return method: Internal rate of return method is one of the capital investment met...

Q: What does the term sales mix mean? How is a weighted-average unit contribution margin computed?

A: Contribution Margin is defined as the difference between the sales and the variable cost. In other w...

Q: LJH Bhd used the cost method to record its intangible assets and estimated the useful life of the de...

A: Intangible Assets:  Intangible assets are those assets which does not have physical form. while work...

Q: At year-end, the Circle City partnership has the following capital balances: Manning, Capital $1...

A: Clark capital balance = $80,000 But paid $90,000 as final settlement. Extra amount paid is equal to ...

Q: Describe the use of practical capacity in a TDABC system.

A: Activity-based costing: It is a method that helps in finding the activities performed by a company a...

Q: Explain why some management accountants believe that absorption costing may provide an incentive for...

A: Absorption costing Absorption costing is an accounting method which helps in computing the total man...

Q: 7. KNJ Berhad developed a trademark and copyrights with total costs of RM50,000. The company spent R...

A: Since the question has more than 3 sub-parts, the first 3 subparts are answered. If you want the ans...

Q: Percent of Sales Method At the end of the current year, Accounts Receivable has a balance of $475,00...

A: Here the allowance for doubtful debts need to made as per 'Percentage of sale method'. Under percent...

Q: A 37000 loan at 8.2% compounded semi annually is to be repaid by equal semi annual payment over 10 y...

A: Compute the payment if the loan is for 20 periods at 4.1% semi-annual rate as follows:

Q: Marin University sells 6,500 season basketball tickets at $55 each for the entire 13-game home sched...

A: The journal entry for recording the sale of tickets as follows:  

Q: Exercise 10-1 Compute the Return on Investment (ROI) [LO10-1] Alyeska Services Company, a division o...

A: Since the 'Sales' and 'Net Operating Income' amounts are given in the question, based on that we nee...

Q: A $485,000 bond issue on which there is an unamortized discount of $35,000 is redeemed for $470,000....

A: A bond is an interest-bearing loan instrument that is issued by the companies to raise funds for the...

Q: Using a perpetual system, what is the cost of the goods sold for November if the company uses LIFO? ...

A: LIFO: In the Last-in-First Out method, items purchased recently are sold first. So, the value of the...

Q: It is generally agreed that sales revenue should only be ‘realized’ and so ‘recognized’ in the tradi...

A: As per the concept of prudence, the sales revenue is recognized in the books when the sale procedure...

Q: How does process costing differ under normal or actual costing?

A: Process Costing: Process costing is method of cost accounting in which all the costs that are incur...

Q: For the following activitie, explain which of the objectives of managerial accounting activity is in...

A:  

Q: How can an organization help to reduce the problems caused by budgetary slack?

A: Definition: Budgetary slack: The manager intentionally creates a slack into the budget as to avoid u...

Q: A partnership has the following capital balances: Comprix (40% of gains and losses) $ 180,000 H...

A: Value of company = Amount bought in by Mahar /Share of Mahar  Value of company = $280,000 / 25% Valu...

Q: Can somebody check if this is right it's a hw problem on cengage?

A: Hi, All the ratios you have calculated is right. Thanks

Q: On January 1, Parson Freight Company issues 8.5%, 10-year bonds with a par value of $3,800,000. The ...

A: Difference between the issue price and face value will be recorded as discount. Discount = Face valu...

Q: Icy Company makes two products from a common input. Joint processing costs up to the split-off point...

A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question...

Q: Explain the role of variable costing and full costing in evaluating profitcenters

A:   Cost accounting is the branch of accounting that inspects the cost structure of a business. This b...

Q: Are selling and administrative expenses treated as product costs or as period costs under variable c...

A: Variable costing:   Variable costing is the method that is used by the management (managers) for dec...

Q: If the materials price variance is favorable but the materials quantity variance is unfavorable, wha...

A: Click to see the answer

Q: Explain why some production costs must be assigned to products through an allocation process.

A: Production cost: It can be defined as the aggregated cost incurred by the company in the manufacturi...

Q: Accounting Question

A: Contribution Margin Per Unit: Contribution margin is the amount left after covering variable cost pa...

Q: Strawberry Mansion Company reported the following: Standard hours per unit 2.5 hours Standard r...

A: Direct labor rate variance = (Actual rate per hour - Standard rate per hour) * Actual hours used

Q: Define the term accounts receivable?

A: Click to see the answer

Q: Describe the two aspects of adequate disclosure in preparing and presenting of Islamic accounting in...

A: Adequate Disclosures: In accounting, there is a need for adequate disclosures as these provide a cle...

Q: Explain what a master budget is, and list five of its parts.

A: Master Budget: The master budget is the core budget that describes the full process of budget. This ...

Q: Accounting Question

A: Interest expense = Interest payment - Amortization of Premium on Bonds payable 

Q: Dermody Snow Removal's cost formula for its vehicle operating cost is $3,060 per month plus $336 per...

A: A spending variance is the difference between the actual and the expected (or budgeted) amount of a ...

Q: The following selected information was extracted from the 20x1 accounting records of Lone Oak Produc...

A: Hey, since there are multiple requirements posted, we will answer first three requirements. If you w...

Q: Refer to the problem given. Why does an analogous question not arise in the context of the direct-la...

A: The analogous question not arise in the context of the direct labor variances is given below, The Di...

Q: Production and cost data of Akoo Ltd have been recorded over two years thus: Last year Current year ...

A: Workings: Real cost - variable cost = fixed cost.

Q: Tan Corporation issued $600,000,000 of 7% bonds on November 1,2015, for $644,636,000. The bonds were...

A: Compute the interest expenses for the year and the interest payable as follows:

Q: How solvent is the business and how many interest payments can the business service on its own?

A: Solvency is ability of company to cover its Liabilities against its Assets.Solvency determines capab...

Q: What is the meaning of operating leverage?

A: Leverage ratio: It overlooks the mixture of debt and equity which is required for analyzing the abil...

Q: Listed below are several costs incurred in the loan department of Suwanee Bank and Trust Company. Fo...

A: Cost:   Cost can be defined as the cash and cash equivalent which is incurred against the products o...

Q: What is job-order costing?

A: Definition: Cost accounting systems: It is a system which measures, record, and reports the product ...

Q: “If a product is generating a loss, then it should be discontinued.” Do you agree? Explain.

A: A product should not be discontinued simply because it is generating loss because there are many oth...